Federal Deposit Insurance Corporation
550 17th Street, N.W., Washington, D.C. 20429-9990 Deputy to the Chairman and CFO
May 17, 2010
MEMORANDUM TO: The Board of Directors
FROM: Steven O. App
Deputy to the Chairman and
Chief Financial Officer
Bret D. Edwards
Director, Division of Finance
SUBJECT: First Quarter 2010 CFO Report to the Board
The attached report highlights the Corporation’s financial activities and results for the period ending
March 31, 2010.
Executive Summary
For the first quarter of 2010, the Deposit Insurance Fund (DIF) balance increased by $145
million to negative $20.7 billion. This increase was primarily due to $3.3 billion in
assessments earned, offset by $3.0 billion in the provision for insurance losses. This is the first
quarterly increase in the fund balance since the first quarter of 2008.
During the first quarter of 2010, the FDIC was named receiver for 41 failed institutions. The
combined assets at inception for these institutions totaled approximately $22.3 billion with a
total estimated loss of $6.3 billion.
For the period ending March 31, 2010, expenditures from the Corporate Operating Budget ran
below budget by 9 percent ($79.4 million). This variance was primarily the result of lower
spending for contractual services and vacancies in budgeted positions in both the Receivership
Funding and the Ongoing Operations components.
550 17th Street, N.W., Washington, D.C. 20429-9990 Deputy to the Chairman and CFO
May 17, 2010
MEMORANDUM TO: The Board of Directors
FROM: Steven O. App
Deputy to the Chairman and
Chief Financial Officer
Bret D. Edwards
Director, Division of Finance
SUBJECT: First Quarter 2010 CFO Report to the Board
The attached report highlights the Corporation’s financial activities and results for the period ending
March 31, 2010.
Executive Summary
For the first quarter of 2010, the Deposit Insurance Fund (DIF) balance increased by $145
million to negative $20.7 billion. This increase was primarily due to $3.3 billion in
assessments earned, offset by $3.0 billion in the provision for insurance losses. This is the first
quarterly increase in the fund balance since the first quarter of 2008.
During the first quarter of 2010, the FDIC was named receiver for 41 failed institutions. The
combined assets at inception for these institutions totaled approximately $22.3 billion with a
total estimated loss of $6.3 billion.
For the period ending March 31, 2010, expenditures from the Corporate Operating Budget ran
below budget by 9 percent ($79.4 million). This variance was primarily the result of lower
spending for contractual services and vacancies in budgeted positions in both the Receivership
Funding and the Ongoing Operations components.
2
The following is an assessment of each of the three major finance areas: financial statements,
investments, and budget.
Trends and Outlook
Financial Results Comments
I. Financial
Statements Since the fourth quarter 2008, the FDIC has resolved 128 institutions
using a Whole Bank Purchase and Assumption resolution transaction
with an accompanying Loss Share Agreement on the assets purchased
by the acquirer. Under the terms of the agreements, losses on the
covered assets are shared between the acquirer and the FDIC in its
capacity as receiver of the failed institution. As of March 31, 2010, DIF
receiverships are estimated to pay approximately $25.7 billion over the
life of these loss-share agreements (typically 5 to 10 years) on
approximately $143.0 billion in total covered assets. The estimated
liability for loss-share is accounted for by the receiver and is considered
in the determination of the DIF’s allowance for loss against the
corporate receivable from the resolution. To date, 65 receiverships have
made loss-share payments totaling $2.6 billion.
The following is an assessment of each of the three major finance areas: financial statements,
investments, and budget.
Trends and Outlook
Financial Results Comments
I. Financial
Statements Since the fourth quarter 2008, the FDIC has resolved 128 institutions
using a Whole Bank Purchase and Assumption resolution transaction
with an accompanying Loss Share Agreement on the assets purchased
by the acquirer. Under the terms of the agreements, losses on the
covered assets are shared between the acquirer and the FDIC in its
capacity as receiver of the failed institution. As of March 31, 2010, DIF
receiverships are estimated to pay approximately $25.7 billion over the
life of these loss-share agreements (typically 5 to 10 years) on
approximately $143.0 billion in total covered assets. The estimated
liability for loss-share is accounted for by the receiver and is considered
in the determination of the DIF’s allowance for loss against the
corporate receivable from the resolution. To date, 65 receiverships have
made loss-share payments totaling $2.6 billion.